Stocks of polyester fabric are mounting in Chinese mills. As per a CCF Group report, the operating rate of downstream fabric mills in Haining, Changshu, Xiaoshan and Shaoxing is falling, disfavoring a rigid demand for polyester fiber. Falling feedstock prices have discouraged sales of polyester fiber too. Downstream buyers would rather cut the run rate than hoard stocks. The processing fee of the whole industrial chain is shrinking. Players' mindset will not recover until feedstock prices stabilize. Even if buy-the-dip appears, it is simply a transfer of polyester inventory. Polyester companies are still expected to face a big pressure to cut production during the Lunar Chinese New Year holiday.

The rapid ups and downs of raw materials have disrupted market sentiments. Fabric traders and end-users who make finished goods were hurt the most with volatile raw material prices. Prices of raw materials surged when the regulation of energy consumption was strict in late September and October, while buyers needed to prepare feedstock for the coming online shopping spree in November. As a result, many downstream players placed orders and even hoarded up a large quantity of fabrics. However, feedstock prices dropped rapidly later. Most fabric traders, especially those who purchased for speculation, faced serious losses. Some even canceled their orders with fabric mills.

Fashion for Good, the global platform for fashion and textile innovation for a better tomorrow, launched the ‘Sorting for Circularity Project’ in India to understand the pre-consumer and post-consumer textiles waste streams. This consortium project to pilot sorting and mapping solutions in India, aims to build an infrastructure towards greater circularity for future.

With the Sorting for Circularity India Project, Fashion for Good calls on stakeholders within the textile waste sector in India to collaborate to map the Indian textile waste landscape. Data and resources volunteered are crucial to obtaining real world estimates beneficial to mapping the landscape and successfully testing technologies that are best placed to address the challenges.

Working for a better Tomorrow

The project is a joint initiative of Fashion for Good with partners, adidas, Levi Strauss & Co., PVH Corp, Arvind Limited, Birla Cellulose and Welspun India. A key technology partner for the project is Fashion for Good innovator Reverse Resources who provides the analysis of pre-consumer textile waste streams in addition to designing and running the pre-consumer pilot. The project is supported through catalytic funding provided by Laudes Foundation.

Mapping India’s textile waste landscape

As a strong textiles manufacturing and consuming country, India offers a large streams of pre-consumer as well as domestic post-consumer waste. In fact, pre-consumer waste is only partially recycled, with the remaining portion mostly downcycled to products of inferior quality. And domestic post-consumer waste is tough to trace, with limited data to understand waste, quantities, composition, and other factors key to recycling. As Katrin Ley, Managing Director, Fashion for Good says, “India is a critical hub, not only for textile production and consumption, but also as a global post-consumer textile waste destination. This project is pivotal to understanding the size of this considerable market and providing the incentive, tools and means for the industry to benefit from the wealth of this untapped resource.”

In fact, India is also one of the largest recipients of global post-consumer textile waste, with millions of tonnes, worth over €100m, of discarded textile being brough into the country and then manually sorted at various hubs. What’s more, there is very little information on this imported waste.

Moreover, there are no technologies that organize, categorise and sort materials to ensure quality textile waste is accessible for recyclers, who require sorted feedstocks in large volumes. Other challenges for recyclers include significant barriers to the growth of chemical recycling technologies in India.

The Sorting for Circularity India project will address all these challenges and build an accessible infrastructure for manufacturers, sorters, collectors, waste handlers and recyclers in India. Over 15 months, the project will demonstrate a new textile value chain across three phases. Firstly, by obtaining an overall understanding of the textile waste supply chain of pre- and post-consumer textile waste in India. Secondly, by identifying and piloting technologies that enable the traceability of textile waste and its accessibility to existing recyclers. Thirdly, it will be providing recyclers access to textile waste feedstocks that meet the quality parameters of advanced recycling technologies, giving these technologies an incentive to scale in India.

Partner Support

Many Indian textile manufacturers have collaborated on this project. As Abhishek Bansal, Head Sustainability, Arvind explains. “Recycling technologies are going to be the future of the industry and to get there we need access to traceable, high-quality textile waste for all waste streams. We will be looking at efficiently recycling traceable textile waste and help along in building a new textile waste value chain in India. This project is a great opportunity to help organise the India textile waste market, making it traceable and accessible to recyclers, manufacturers, and brands.”

Birla Cellulose is also partnering this project as H K Agarwal, Business Director Designate, Birla Cellulose opines “A collaborative approach to building a reliable and robust supply chain of pre- and post-consumer waste is crucial for scaling the circular business model for the fashion industry and for Birla Cellulose to reach our ambitious goal of scaling circular fibres such as Liva Reviva to 100,000 tonnes per year by 2024. This project can have a huge social impact by creating more value from waste by collection, segregation and upscaling of textile waste and create a win-win situation for all stakeholders while making fashion more sustainable. Birla Cellulose is excited to be part of this partnership.”

In an open letter to the chairman of Apparel Export and Promotion Council, CMAI chairman, presidents and secretaries of all garment and hosiery associations and prominent garment and hosiery manufactures, Rikhab C Jain, Chairman, T.T. Ltd has written the stats put forward by CITI and Spinning Associations to the Minister of Textiles, Commerce and Railway, Piyush Goyal on cotton and cotton yarn price rise is skewed and incorrect. He writes, indeed there are conflicting interests within India’s textile industry but no stakeholder should give wrong information, incorrect, skewed and twisted data about the impact of over 70 per cent rise in cotton prices within last few weeks.

Incorrect facts on cotton and cotton yarn price rise

Jain highlights CITI statement that cotton accounts for 55 to 60 per cent of yarn cost and yarn cost account 20 to 25 per cent of the garment and made up cost is untrue thereby creating a wrong impression on decision makers. Jain counters CITI statement that says yarn cost for garment is 20 to 25 per cent only. “Yarn cost for garment, made up and hosiery articles will range from 40to 65 per cent depending upon lower segment, middle segment or higher segment products. Obviously packing cost and value addition is more in case of elite products but even their yarn cost is not less than 40 per cent. In case of fabric, yarn cost may touch even 80 to 85 per cent. For instance, for white cotton knitted fabric the value addition is just 15 to 20 per cent,” Jain writes.

He goes on to say “Spinning Mill Associations and CITI have wrongly printed papers to impress that rise in cotton prices and cotton yarn prices have not gone up in tandem.” Cotton yarn prices have moved up over 65 per cent against cotton price rise of 80 per cent in the post COVID period. This clearly shows, yarn prices has moved up much more than warranted. “Even if cotton cost is taken as 60 per cent of yarn cost, yarn prices should not have increased by more than 50 to 55 per cent (assuming 10 per cent inflation in other costs).” And this has impacted clothing prices at a time when consumers are hard up on spending.

Jain goes on to explain as price of knitting, processing and margins of spinning mills have increased, garment and apparel sector must raise the issue of increased burden due to cotton and yarn price rise. “Lot of spinning mills earn reasonably but not unduly. Lets not speculate in cotton, not disturb the textile industry, the mother industry of India.” He argues, the facts presented to the minister are wrong and disturbing and were presented with an objective that the government should not to take any action against speculation and cotton speculators.

In his letter Jain has urged all garment, apparel and hosiery, made ups, fabric manufacturer including Khadi and handloom to take immediate action on the crisis due to rising cotton prices. He sums up by saying “Let fresh representation be made to the government and spinners associations. CITI in fact is not an apex textile body but only a new version of Indian Cotton Mills Federation (ICMF).”

US apparel sellers are seeing customers returning to stores. Customers returning to schools and offices are shopping more at physical stores following the easing of Covid curbs. People stuck at home during lockdowns turned to comfortable joggers and sweatshirts, but reopening of schools, workplaces and public spaces following vaccinations has prompted them to splurge again on street wear, including jeans and shirts. The start of holiday season has been promising. Customers have come out early to shop and have been responding well to assortments. Retailers have shrugged off holiday inventory concerns, confident they have ample goods despite port congestion and some factory closures. American department store chains delivered strong results for the fiscal third quarter.

American Eagle Outfitters’ inventory at cost at the end of the third quarter increased 32 per cent as it deployed pricier air freight to navigate global supply chain issues. The apparel chain has been beefing up its logistics game. Total net revenue increased 24 per cent from a year earlier. American Eagle revenue jumped 21 per cent while that of the brand Aerie, which sells leggings and bras, rose 28 per cent. Similarly Abercrombie & Fitch’s net sales rose ten per cent. Sales at Macy’s stores rose 35.6 per cent.

With Coronavirus cases increasing again in Europe, it will have a massive impact on the Bangladeshi readymade garment sector, given that it is the largest destination for clothes manufactured in Bangladesh. Bangladesh sends over 50 per cent of its exportable goods to the European Union markets.

Europe has once again become the epicenter of the pandemic, with many European Union nations recording the highest Covid cases in recent days. Bangladesh is concerned about the current spread of Coronavirus in major EU markets. The readymade garment sector had started getting orders and had been on track after overcoming the pandemic last year. The entire workforce was a victim of Covid during the lockdown. Workers lost wages during from March to May of 2020 alone, mainly because there were not enough orders to keep factories afloat. Some 82 per cent of workers’ income declined. By June 2020, export orders had fallen by 40 to 45 per cent compared to 2019. Workers also faced critical challenges to their mental health and overall emotional well-being, being worried about both the pandemic and their financial futures — providing for their families, feeding them, and caring for their children.

For the first 10 months of 2020, Sri Lanka’s apparel and textile exports grew by 21 per cent. The overall export and deemed export industry is facing serious challenges in logistics, both in terms of cost and lead times. Additionally global apparel brands are pursuing an in-country verticality strategy for sourcing their products.

Fabric and accessory manufacturers say that by encouraging the local apparel and textile industry, the industry has potential and is poised for certain growth if the environment remains conducive. This in turn can support the economic needs of the country. The Fabric & Apparel Accessory Manufacturers Association (FAAMA), which is the governing body of fabric and apparel accessory manufacturers in Sri Lanka and a subsidiary association of the Joint Apparel Association Forum Sri Lanka (JAAF), expressed its concerns and recommendations in writing to the CBSL Governor Nivard Cabraal.

However, a move by the Central Bank of Sri Lanka requiring apparel exporters to use only local currency for domestically sourced inputs has caused a furore across the biggest foreign exchange earning sector. Fabric and apparel accessory manufacturers sell their products directly to apparel exporters (locally and overseas) hence their businesses are classified as deemed exporters.

The entirety of industry invoicing to apparel exporters has always been in dollars, euros or sterling pounds. The raw materials they require, such as yarns (both cotton and synthetic), dyestuff, chemicals etc, including machinery and spare parts, are not available locally and have to be imported from different countries around the world. Payment for such materials and machinery needs to be settled in dollars.

Asia Pacific Rayon (APR), Indonesia’s largest integrated viscose, rayon producer is committed to having a positive impact on climate and nature, clean manufacturing, circularity and inclusive communities by 2030. APR aims at pioneering accelerating circularity by producing 20 per cent of its viscose using recycled textiles. It will collaborate with industry partners to advance the collection, sorting and recycling of textile waste.

Through partnerships and investments, APR will further its research to understand the economics and logistics of recycled textiles, engage with the textile design community to inspire creativity and forge partnerships with innovators to advance technology solutions at scale. It will pioneer textile waste recycling in Indonesia, from establishing the collection, sorting and logistics infrastructure needed to ensuring textile waste do not end up in landfills. Another key aim is to move sustainable fashion beyond being niche and make it accessible to designers and consumers everywhere. The company would focus on closed-loop technology and product innovation as well as clean manufacturing and is committed to reducing 50 per cent of its water use, 80 per cent in waste-to-landfill per product ton through closed-loop production and recycling investments and a greater than 95 per cent sulfur recovery rate by 2030.

Demand from companies for CmiA (cotton made in Africa) cotton is growing. As one of the world’s leading initiatives for sustainably produced cotton in Africa cotton made in Africa represents a socially and environmentally responsible basis for the global textile chain. It gives a face to the small-scale farmers who form the bedrock of the fashion industry. Working in accordance with the Cotton made in Africa standard, some one million small-scale farmers from 10 countries in Sub-Saharan Africa currently account for around 30 per cent of African cotton production.

CmiA cotton has a significantly smaller ecological footprint than the global average. With greenhouse gas emissions at 13 per cent below the global average for cotton cultivation, CmiA cotton also contributes less to climate change. Small-scale farmers benefit from agricultural and business training that enables them to improve their yields and cultivation methods. Beyond sustainable cotton production, Cotton made in Africa actively advocates for issues like healthcare, respect for children’s rights, and equal rights for men and women. This directly contributes to improved awareness of social issues in village communities. Factory workers in the ginneries, where cotton seeds are separated from the fibers by machine, benefit from improved working conditions. Consumers can identify these products through the Cotton made in Africa label. Each purchase represents a direct investment in improving living conditions and protecting the environment.

Bangladesh can capture a big share of the textile and garment recycling industry. The country has a big production base for cotton fiber clothing. Other countries having such an opportunity are Vietnam, Turkey, India, Malaysia and Indonesia. These are all markets with high viability for such a model, given the economic significance of the textile industry and commitment of local policymakers to supporting the sector. Bangladesh has the potential to produce $1.2 billion worth of recycled textile and garment items as the country has a big production base for cotton fibre clothing items, says a Global Fashion Agenda (GFA) and McKinsey & Company study.

Less than one per cent of materials used to produce clothes are recycled. In 2020, the overall uptake of recycled fibers compared to total fiber production was only around 8.1 per cent, with 7.6 per cent coming from recycled polyester from plastic bottles, not textiles. Cotton accounted for 24 per cent of the global fiber market in 2020, while recycled cotton made up less than one per cent. So there is a clear opportunity in building the enablers to scale up textile recycling.

Circular products, which require little to no virgin resources, are key to ensuring a more sustainable fashion industry as 40 per cent of greenhouse gas emissions from factories are created during the manufacturing process. About 35 per cent of the total amount of fibers wasted while making garment items is generated during production.

India’s production of textile machinery, parts and accessories during 2020- 21 recorded a marginal decrease of five per cent reveals Textile Machinery Manufacturers’ Association (India) data. During the fiscal capacity utilization decreased from 49 to 46 per cent as compared to the preceding year. This is despite the fact that there was negligible business during the first two quarters of 2020-21. The bulk of the demand was met through imports, says Vallabh Thumar, Chairman, TMMA.

Total domestic demand for textile machinery during 2020-21 was Rs 9118 crores of which supplies from the domestic machinery industry amounted to Rs 1786 crores, aggregating 20 per cent of the total demand. Exports during 2020-21 rose to Rs 3,307 crores as against Rs 2,556 crores achieved during 2019-20. On the other hand, imports were reduced to Rs 8096 crores as against Rs 9,273 crores during the year. Digital printing is a happening segment in textiles. The new machines are versatile and fast and save on water. Hence, the demand is high for these. Weaving machines and spinning machinery and accessories are also imported.

The Indian textile engineering industry is operating at about 70 per cent capacity utilisation, serving 65 per cent of the textile sector’s demand. The Indian textile machinery industry has been experiencing tremendous growth over recent years, facilitated by the country’s booming textile and apparel market.